A Kent-based steel fabricator, Nusteel Structures Ltd, has transitioned to an employee ownership trust (EOT).
- The move was publicly announced via a LinkedIn post, marking a significant shift in the company’s ownership structure.
- Nusteel’s board remains in control, ensuring business strategies and decisions continue smoothly.
- The EOT aims to foster Nusteel’s growth in steel fabrication for infrastructure projects.
- Though some firms faced challenges post-transition, Nusteel shows optimistic financial indicators.
Nusteel Structures Ltd, a steel fabricator operating out of Hythe, Kent, has become the latest in the construction sector to embrace the employee ownership trust (EOT) model. This transition was announced in a LinkedIn post, highlighting a major shift in its ownership structure, which took place last Tuesday, 29 October.
The existing management team at Nusteel will continue to lead the company, maintaining control over strategic and business decisions. This continuity is pivotal to ensuring that the company stays on course with its long-term objectives, particularly as it navigates this new ownership framework.
Nusteel’s expertise lies in the fabrication of steel for critical infrastructure such as bridges, roads, and rail networks. Its clientele includes major tier one contractors like Costain, Balfour Beatty, and Graham, signifying its established role in the sector. The change in ownership aims to enhance the company’s capacity for growth and align with its progressive ambitions.
From its financial standing, Nusteel reported a turnover of £12.6 million for the year ending 31 October 2023, which marks a slight increase from the previous year’s £12.5 million. This financial stability is further supported by a pre-tax profit margin improvement, climbing from approximately £37,202 in 2021/22 to £246,000—a significant eightfold increase.
Further strengthening its financial position, Nusteel’s cash reserves have more than doubled in the last year, growing from £1.7 million to £4.1 million, with no recorded short- or long-term debt. This robust cash flow will likely contribute to the company’s future investments and operational flexibility.
With a workforce averaging 89 employees monthly, including 67 in production roles, Nusteel reported a slightly reduced turnover per production employee—£187,700 compared to the previous year’s £191,800. The company remains committed to maintaining a skilled workforce integral to its production capabilities.
While the EOT model offers benefits such as no capital gains tax for shareholders upon sale and potential annual tax-free bonuses up to £3,600 for employees, it is not without risks. Notably, other firms like Michael J Lonsdale, Buckingham Group, and Readie Construction have faced difficulties post-transition. Nevertheless, Nusteel’s current financial health provides a stable platform for adjusting to this new model.
Nusteel’s strategic transition to employee ownership signals a promising step towards sustained growth and stability in the construction sector.
